Uncertainty over Argentinan rains in the extended 6 to 15-day time frame has helped to provide underlying support. While China meal rallied overnight, soybeans were a bit lower. China is supportive to products but not to soybeans. Without help from weather, the market looks vulnerable to a sell-off into the January USDA production report. Funds are holding a hefty net-long position and without weather help, Argentina and Brazil’s combined production should jump 5.7 million tonnes from last year up 3.7%. World-ending stocks are projected at a record high, and US-ending stocks at 480 million bushels, a 10 year high. The market’s focus will be on the forecast in Argentina over the next 8-14 days. Maps were hinting for a better chance of rains this weekend and into early next week, but the midday GFS model yesterday took some rain out of the near term forecasts as well as the extended run. The marker did not react to the change in the forecast as confidence remains low in the extended models. The managed money trader reduced their net long position by 12,057 contracts to 122,648 contracts and the long liquidation trend is seen as bearish. A close below 1020 is needed for a move to 1003, with resistance at 1041 and 1048.
Series 3 Licensed
Senior Market Strategist
Jeff studied finance at the University of Wisconsin-Madison and at Loyola University. He left the corporate world in 1995 to pursue his dream of working in the financial markets. Jeff's trading career began as a clerk in the S&P 500 pit at the Chicago Mercantile Exchange. This is where he developed a great interest in the options market that led him to the retail futures business. Jeff spent a few years as a broker's assistant before managing clients of his own.